10 Key Changes in the Vietnam IP Law of 2022 and Our Comment on Their Impact on the Business Environment and Innovation Activities in Vietnam

Attorney Le Quang Vinh – Bross & Partners

Email: vinh@bross.vn

Protection and enforcement of intellectual property (IP) rights is an obligation of all WTO members, including Vietnam because IP rights included in the TRIPs Agreement are determined as one of the pillars of the global trade system. New free trade agreements namely CPTPP, EVFTA, RCEP to which Vietnam is a member continue to require that Vietnam protect IP rights at a higher level than the TRIPs minimum protection standard. This incident led to a series of major changes in the 3rd Amendment to the 2005 IP Law that was passed by the National Assembly in June 2022 (“IP Law 2022”).Bross & Partners would like to post again attorney Le Quang Vinh’s short presentation, one of the invited speakers at "Conference on deployment of the 2023 science, technology and innovation tasks" taking place on the afternoon of December 28, 2022 at the  Ministry of Science and Technology with the direction of Deputy Prime Minister Vu Duc Dam and many members of the Central Committee in charge of Science and Technology, Industry and Trade, Scientific and Technological Research, and Political Theory of the Communist Party’s Central Committee.

10 Key Changes in the IP Law 2022

1. Regarding the entitlement to apply for registration of an invention, utility solution, design and layout design, and industrial design (4 subjects of technical creativity), the IP Law 2022 adds first time regulations on which organization is assigned to lead scientific technological tasks using the State budget would have the right to register the above 4 subjects automatically and without compensation,[1] except for where 4 subjects result from the scientific technological task in the field of national security and defense. Where 4 subjects merely utilize the State budge in part, the right to register corresponds to the proportion of the State budget allocated to the leading organization automatically and without reimbursement, except for the case that these 4 subjects are the result of scientific and technological tasks in the field of national defense and security. The right to register shall belong entirely to the State, ie. by one of the three entities legally representing the state owner[2] if 4 subjects within the field of national defense and security use the entire State budget.

2. The IP Law 2022, for the first time, adds a new mechanism that allows a third party to object to an industrial property registration application, in addition to maintaining the old mechanism, that is, a third-party opinion (third party observation) only plays the role as a reference source during examination of IP applications. The difference between these two mechanisms is that while the right to submit a third party’s written opinion can be exercised from the time the industrial property registration application is published in the Industrial Property Official Gazette until before the date of issuance of decision to grant a protection title, the right to file an opposition shall be limited to 9 months, 4 months, 5 months and 3 months counting from the date of corresponding applications for registration of an invention, design, layout design, or trademark are published.[3]

3. The IP Law 2022 adds for the first time a new mechanism allowing a third party to oppose applications for registration of inventions, trademarks or geographical indications, as well as including multiple legal grounds for revoking protection titles. Among them, for example, applicants have no right to register an IP object, or register a trademark in bad faith; modification or supplementation of the application has expanded or exceeded the scope of the disclosed subject matter; patent was not disclosed sufficiently and clearly in the invention specification to the extent that a person having ordinary skills in the art; filed patent applications violates the regulations on security control for inventions before being filed abroad.[4]

5. In order to limit the absolute nature of moral rights, the IP Law 2022 stipulates that the eligibility to enjoy full moral rights (except for the right to publish) for cinematographic works is only granted to screenwriters and directors. Persons who are filming, composing music, acting are only given one moral right, that is, being named and credited when the work is published. In addition, in order to limit unnecessary disputes related to the possibility of infringing upon moral rights, the first time the IP Law 2022 allows financial investment organizations to negotiate with screenwriters and directors on naming or editing the work.[5]

6. The IP Law 2022 redefines derivative works, specifically, Clause 8, Article 4 stipulates that a derivative work is a work created on the basis of one or more existing works through translation from one language to another languages, adaptations, compilations, annotations, selections, arrangements, musical adaptations and other adaptations.

7. Royalties (a term widely used in the press to refer to an amount of money paid by an organization or individual when using another person's intellectual property rights) first appeared in the IP Law 2022 (only applicable to copyright and related rights) is a payment for the creation or transfer of copyright or related rights in a work, performance, phonogram, video recording, program broadcast, including remuneration

8. The IP Law 2022 provides for the first time the exceptions to copyright infringement for people with visual, hearing, physical, or intellectual disabilities; extending exemptions from copyright infringement. For example: reasonable copy for scientific research and no commercial purposes, reasonable use of works for illustration in publications, use of works in government service. The IP Law also exempts such acts as copying a work only to exercise other rights, temporary copying due to technical requirements, or subsequent distribution of an original copy or copy of the work made or authorized by the copyright owner for distribution

9. The IP Law 2022 amends the definition of a well-known trademark by stipulating that a well-known mark is "trademark widely known by the relevant public in the territory of Vietnam" to conform to 8 criteria for well-known trademark recognition in Article 75 as well as to comply with regulations on protection of well-known trademarks included in the EVFTA, CPTPP, TRIPs and the 1999 WIPO’s Joint Recommendations concerning provisions on the protection of well-known trademark. Another key change is that the Law IP 2022 additionally stipulates that the point of time on which an earlier trademark had become famous must take place before the filing date of the disputed trademark in order to avoid granting protection to well-known trademarks too broad.[6]

10. The IP Law 2022, for the first time, introduces a mechanism for holding or exempting liability for intermediary service providers (ISPs) for copyright or related rights infringement made by their users. Article 198b liability exemption is of a conditional nature, for example an ISP providing hosting service is only exempt from liability if (a) does not know that the content such digital information infringes upon copyright and related rights; (b) take prompt action to remove or prevent access to such digital information content when it becomes aware that such digital information content infringes upon copyright or related rights.

Our Comments

1.     The new provisions in the IP Law 2022 are transparent, complete, and clear, especially those governing technical innovations formed from the results of scientific and technological tasks using the state budget. It is very positive in that it will help increase the percentage of patent applications filed by Vietnamese people[7] compared to foreigners because the law has helped to solve the problems of registration rights, obligation to register inventions, and benefit sharing between inventors, leading organization, the state, and intermediary (broker). Practice shows that an increase in the number of Vietnamese patent applications will help change the law of the transformation of quantity into quality like the development of a large number of Chinese applications, contributing significantly to the spectacular development of Chinese technology and intellectual property system.[8]

2.     Transposition of international commitments as stipulated in FTAs that Vietnam has recently signed such as CPTPP, EVFTA, RCEP into the IP Law 2022 will make foreign investors more trust in the IP protection system in Vietnam. Some commitments included in these FTAs that Vietnam has put into law for the first time, such as making invisible marks registrable trademark; provision for a loss of novelty exception for inventions disclosed by the author within 12 months as required by the CPTPP; holding/exempting secondary liability for ISPs or OSPs when their users upload/share digital content that infringes on copyright and related rights on the internet

3.     The IP Law 2022 makes a great contribution to solving the problem of balancing rights and interests between IPR holders, competitors, and the interests of society with new regulations such as the addition of exceptions to copyright infringment to protect other constitutional rights such as freedom of expression, right to study, right to access to information; supplement and explain the mechanism of exhaustion of copyright applicable for the right to distribute originals or copies of works; the obligation to prove that the time of becoming famous of the earlier trademark must be prior to the filing date of the contested trademark to prevent the possibility of granting too broad protection to the right holder, thereby restricting competition; holding/exempting liability for ISPs not only means legal protection for rights holders in the digital environment, but also helps to strengthen state management capacity for internet-based economic activities; provisions on preventing and compensating if IPR holders abuse IP rights through measures to protect IP rights.

4.     According to WIPO, intellectual property (IP) also known as intangible assets have recently officially been widely recognized that they are the most valuable assets. In the 1980s, IP assets only accounted for 20% of the enterprise value, only 30 years later the value of IP assets accounted for 80% of the enterprise value.[9] A 2012 USPTO research report states that “The entire U.S. economy relies on some form of IP, because virtually every industry either produces or uses it. The report also identified 75 industries, from among 313 total, as IP-intensive, are dependent on intellectual property rights”. These 75 IP-intensive industries contributed over US$500 billion or 34.8% of US GDP as of 2010, directly created 27.1 million jobs or 18.8% of total jobs”.[10] With such practical evidence, it can be concluded that the IP Law 2022 is a law that has a wide influence and impact on all sectors of the economy from entertainment, education, science, technology and technology transfer to commercialization of intangible assets, especially science and technology, innovation activities in Vietnam in the near future.

Bross & Partners, an intellectual property company ranked First (Tier 1) by Legal 500 Asia Pacific, has experience in resolving complicated IP disputes including trademarks, copyrights, patents, plant varieties.

Please contact: Vinh@bross.vn; mobile: 0903 287 057; Zalo: +84903287057; Skype: vinh.bross; Wechat: Vinhbross2603.